Special instructions on how to comply with 421-a rent approval and registration requirements for projects that received HPD notices of impending revocation in November 2016 or DOF notices regarding potential suspension of 421-a benefits mailed in December 2016.
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On June 15, 2015, the legislature enacted Chapter 20 of the Laws of 2015, which made the following changes to Real Property Tax Law Section 421-a:
The new law makes some changes to the Existing Program. One significant change is that for projects that commence construction on or after June 15, 2015, affordable units and market rate units must share the same common entrances and common areas and the affordable units cannot be isolated to a specific floor or area of the building.
HPD has received questions about whether Section 66(n) of Chapter 20 of the Laws of 2015 imposes an application deadline for projects that seek to be grandfathered under the existing 421-a program. It does not. Chapter 20 of the Laws of 2015 contained detailed grandfathering provisions. See Sections 63-a, 63-b and 63-j of Chapter 20 of the Laws of 2015, amending, respectively, RPTL Sections 421-a(2)(a)(iv)(A), 421-a(2)(c)(ii) and 421-a(6)(b). Applicants should rely on those grandfathering provisions for purposes of determining continued eligibility under the existing program.
The New Program is suspended until representatives of residential real estate developers and construction labor unions sign a memorandum of understanding regarding wages of construction workers performing work on 421-a projects that contain more than 15 units.
Only one application would be required, it would have to be filed within one year after completion, and construction benefits would be retroactive.
The project would have to comply with the affordability requirements and other requirements for 35 years.
Market rate rental units would be subject to rent stabilization during any period in which the actual monthly rent charged is below the vacancy decontrol threshold.
Eligible rental projects would receive:
Rental projects would be required to choose one of three affordability options and comply with it for the entire benefit period:
Eligible homeownership projects would receive:
Homeownership projects would have to meet the following eligibility requirements:
The Extended Benefit Program would only be available to rental projects that began construction prior to July 1, 2008 and qualified for a 20-year or 25-year 421-a tax exemption.
Owners who elect to participate would receive either:
During this extended benefit period, the owner would be required to:
The first requirement is identical to the existing affordability requirement applicable to such projects (it simply extends that requirement for an additional 10 or 15 years). The second requirement is an increase over and above the existing affordability requirement.